2020 Income Taxes, updated

I still see a lot of "interesting" interpretations of tax rates, percentages, quintiles, etc., and of course, greed. I admit, the top 1% made out well with the lockdowns and pandemic in 2021 and 2022. Probably own a lot of stock in pharmaceuticals. And with new war expenses, and Biden shoveling all he can to Zalenskyy anyone invested in war materiel is doing well. But here's the latest I could find on 2020, the last full year of Trump's term.

 
"Average tax rates for all income groups remained lower in 2020, three years after the Tax Cuts and Jobs Act, than they were in 2017 prior to the reform.

In 2020, taxpayers filed 157.5 million tax returns, reported earning nearly $12.5 trillion in adjusted gross income (AGI), and paid $1.7 trillion in individual income taxes.

The average income tax rate in 2020 was 13.6 percent. The top 1 percent of taxpayers paid a 25.99 percent average rate, more than eight times higher than the 3.1 percent average rate paid by the bottom half of taxpayers.

The top 1 percent’s income share rose from 20.1 percent in 2019 to 22.2 percent in 2020 and its share of federal income taxes paid rose from 38.8 percent to 42.3 percent.

The top 50 percent of all taxpayers paid 97.7 percent of all federal individual income taxes, while the bottom 50 percent paid the remaining 2.3 percent.

The 2020 figures include pandemic-related tax items such as the non-refundable part of the first two rounds of Recovery Rebates and the $10,200 unemployment compensation exclusion."

Who Pays Federal Income Taxes? | IRS Federal Income Tax Data, 2023 (taxfoundation.org)

Some American households may have received $60-70,000 in pandemic relief

 Who would consider going back to work?  In some states the figure is as high as $100,000.

The unemployment insurance benefits paired existing state-level weekly aid with a federal payment ranging from $600/week under the CARES Act to $300 per week under the American Rescue Plan Act. The aid was also extended to workers who usually do not qualify for unemployment benefits, including gig economy workers and independent contractors. Unemployed workers could continue to claim unemployment insurance benefits past the usual 26-week window during the pandemic.

Take, for example, a married household with two young children living in Georgia with a single earner who made $60,000 in 2019. Imagine the single earner lost her job on April 1, 2020 due to the coronavirus pandemic. Prior to the pandemic, the family would have been eligible for $365 per week from the state of Georgia in unemployment benefits up to 26 weeks and $4,000 in Child Tax Credit, for a total of $13,490.

Read further: https://taxfoundation.org/total-covid-relief-unemployment-insurance/?

Will there really be more jobs with a tax cut?

You are right to be suspicious.  Look what we were told about Obamacare and saving money and keeping our doctors.  But Tax Foundation has crunched some numbers (for the Senate plan) and says yes, but it depends on your state. Stock market went crazy with the news Thursday—not sure that’s more jobs however.  Ohio already apparently has an unfriendly tax climate—I think we’re something like 45^th and Illinois is 46^th—not a good place to be.  Tax Foundation estimates 35,063 jobs and $2,375 after tax income in Ohio.  For Illinois 38,465 jobs and $2,701 after tax income. A lot more is involved, however.  We all know Mt. Morris jobs didn’t go to Thailand, they went to states in southern USA or to Rockford.   https://taxfoundation.org/tax-cut-senate-tax-cuts-and-jobs-act/

In this example of 9 different filers some get more than others, but the only ones losing are a married couple, Laura and Seth (one earner), with 2 children earning $2 million. Of the nine examples, they have the highest income.  The one who gains the most is the single guy (Jason) earning $52,000.  Of course, if single guy Jason had some children and a wife, he’d be getting EITC and the government would be paying him a bonus of about $6,000.  But only tax payers are covered in this example of 9 households, not the 49% who don’t pay any federal income tax.  https://taxfoundation.org/tax-cut-senate-tax-cuts-and-jobs-act/ 

Democrats of course will point out the gap between $52,000 and $2,000,000 not the change in what each household pays.

Tax Foundation Projects 2011 Tax Parameters Using New Inflation Numbers

With Obama and Congress dithering over the Bush tax cuts and probably leaving it all in limbo for the lame duck Congress when those already voted out will have a chance the push something through, I can't imagine anything worse than being a professional tax preparer, or someone who will need their services (and that's just about everyone). The Tax Foundation has prepared three scenarios (as of Sept. 17).

From news release: "Tax Foundation Fiscal Fact, No. 245, "Tax Foundation Projects 2011 Tax Parameters Following Release of New Inflation Data," outlines inflation-adjusted 2011 federal income tax parameters under three policy scenarios:

(1) All the Bush-era tax cuts expire;

(2) All the tax cuts are extended (Republican plan);

(3) Congressional Democrats' proposal is adopted, which is similar to the Obama plan but does not extend major stimulus measures or include additional limits on itemized deductions.

The report is available online at http://www.taxfoundation.org/publications/show/26719.html."

The Tax Foundation - Tax Foundation Projects 2011 Tax Parameters Using New Inflation Numbers

Tax Attack

Someone show this to Senator Obama.



"Declaring that the "Corporate Tax Must Come Down," Andrew Patterson of Edmond, Oklahoma won the first prize of $5,000 in the Tax Foundation's CompeteUSA YouTube Contest with a video called "Tax Attack." The contest was part of the CompeteUSA campaign which aims at raising awareness of America's high business tax rates and how those taxes have an impact on our competitiveness, wages, and living standards.

In "Tax Attack," Patterson highlights that businesses make everyday decisions based on corporate tax systems and that our high business taxes are making American corporations look internationally for their offices, banking, labor and operations. Patterson, who lives in Edmond, Oklahoma, is a business owner himself, providing film and postproduction services to companies including retailers, business firms, nonprofit organizations and natural gas companies."

Seems we're already doing a lot of that wealth redistribution Mr. Obama likes so much, but how's he going to get American companies to come home? Force them so he can tax them more?